Top takeaway: Laws around nonprofit lobbying remain unchanged, despite recent White House memo.
On August 28, President Trump sent a memorandum to the Attorney General directing the U.S. Department of Justice (DOJ) “in consultation with the heads of executive departments and agencies, to investigate whether Federal grant funds are being used to illegally support lobbying activities (See, 31 U.S.C. 1352) and to take appropriate enforcement action.”
The memorandum alleges that “the possible use of Federal grants as slush funds for political and legislative advocacy raises serious legal concerns.”
What does the law say?
President Trump’s memorandum appears to misinterpret the relevant federal statute. In fact, federal law does not prohibit nonprofits (or businesses) that receive federal grants, contracts, or cooperative agreements from lobbying.
In 1995, a member of Congress tried to get that type of broad prohibition on lobbying enacted into law, but nonprofits were successful in advocating against it. Instead, the statute referenced in that sentence of President Trump’s memorandum (often known as the Byrd Amendment) merely prohibits nonprofits and businesses that receive federal grants, contracts, or cooperative agreements from using these federal funds to influence other federal funding decisions.
Bottom line
Nothing in federal law prohibits federally funded nonprofits from policy advocacy at the federal level. Additionally, nonprofits are allowed to use other revenue sources to lobby Congress or federal agencies for appropriations or for the awarding, renewal, extension, or amendment of a federal grant, contract, or cooperative agreement.
The memorandum’s implication that a federal statute prevents nonprofits from engaging in any lobbying activities is not accurate. Nonprofit lobbying rules have not changed.
What’s next
The memorandum directs the Attorney General to report to the President on the results of investigations into lobbying activities by federal grant recipients in 180 days.
It is unclear what, if any, enforcement actions federal agencies may attempt to take against nonprofits that receive federal grants and are engaged in lobbying activities. MCN will continue to track this new memo and report on any updates.
Credit to the North Carolina Center for Nonprofits and the New Jersey Center for Nonprofits for their analysis.
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